Q2 2025 Strattec Security Corp Earnings Call
Operator: Greetings and welcome to the Strattec Security Corporation second quarter fiscal year 2025 financial results. At this time, all participants are in listen-only mode.
Greetings and welcome to the Strat take Security Corporation second quarter fiscal year, 'twenty 25 financial results.
At this time, all participants are in listen only mode.
Operator: The question and answer session will follow the formal presentation. If anyone today should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded.
Question and answer session will follow the formal presentation.
If anyone today should require operator assistance. Please press star zero from your telephone keypad.
As a reminder, this conference is being recorded.
Deborah Pulaski: Now my pleasure at this time to introduce Deborah Pulaski, Investor Relations for Strattec. Please go ahead.
It's now my pleasure at this time to introduce Deborah Pawlowski Investor Relations for stress Tek. Please. Please go ahead.
Deborah Pulaski: Thank you and good morning everyone. We greatly appreciate you joining us for Strattec's second quarter fiscal 25 financial results conference call. With me on the call today are Jennifer Slater, President and CEO, and Matthew Pauley, Vice President and Chief Financial Officer.
Deborah Pawlowski: Thank you, and good morning, everyone. We greatly appreciate you joining us for STRATTEC's Q2 fiscal 2025 financial results conference call. With me on the call today are Jennifer Slater, President and CEO, and Matthew Pauli, Vice President and Chief Financial Officer. For those of you who may be newer to the story, Matt just recently joined us as CFO in mid-November 2024. Jen and Matt are going to review our Q2 2025 financial results and provide an update on the progress being made to transform STRATTEC. You can find a copy of the news release and the slides that accompany our conversation today on the investor relations section of the company's website. If you are reviewing those slides, please turn to slide 2 for the safe harbor statement.
Thank you and good morning, everyone. We greatly appreciate you joining us for <unk> second quarter fiscal 'twenty five financial results conference call.
Speaker Change: With me on the call today are Jennifer Slater, President and CEO, and Matthew Poly, Vice President and Chief Financial Officer.
Deborah Pulaski: For those of you who may be newer to the story, Matt just recently joined us as CFO in mid-November last year. Jen and Matt are going to review our second quarter 2025 financial results and provide an update on the progress being made to transform Strattec. You can find a copy of the news release and the slides that accompany our conversation today on the investor relations section of the company's website. If you are reviewing those slides, please turn to slide 2 for the Safe Harbor Statement. As you are aware, we may make some forward-looking statements on this call during the formal discussion, as well as during the Q&A.
Speaker Change: Those of you who may be newer to the story, Matt just recently joined US as CFO in mid November last year.
Speaker Change: It didn't matter going to review, our second quarter 2025 financial results and provide an update on the progress being made to transform strategy.
Speaker Change: You can find a copy of the news release and the slides that accompany our conversation today on the Investor Relations section of the company's website.
Speaker Change: If you are reviewing those slides please turn to slide two the safe Harbor statement.
Deborah Pawlowski: As you are aware, we may make some forward-looking statements on this call during the formal discussion, as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are discussed in the earnings release, as well as with other documents filed by the company with the Securities and Exchange Commission. You can find these documents on our website as well. I want to point out that during today's call, we will discuss some non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
Speaker Change: You are aware, we may make some forward looking statements on this call during the formal discussion as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are discussed in.
Deborah Pulaski: These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are discussed in the earnings release, as well as with other documents filed by the company with the Securities and Exchange Commission. You can find these documents on our website as well. I want to point out that during today's call, we will discuss some non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information isolation or as a substitute for results prepared in accordance with GAAP.
Speaker Change: The earnings release as well as with other documents filed by the company with the Securities and Exchange Commission you can find these documents on our website as well.
Speaker Change: I want to point out that during today's call. We will discuss some non-GAAP measures, which we believe will be useful in evaluating our performance you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with gas. We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying.
Deborah Pulaski: We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release and slides.
Deborah Pawlowski: We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release and slides. With that, if you would turn to slide 3, I will turn it over to Jen to begin. Jen?
Speaker Change: The earnings release and slides.
Deborah Pulaski: With that, if you would turn to slide three, I will turn it over to Jen to begin.
Jim: With that if you would turn to slide three I will turn it over to Jim to begin.
Jennifer Slater: Jen. Thank you, Deb, and welcome, everyone. I am encouraged with the progress we are making to transform Strattec into a stronger, sustainable business with improved earnings power. I appreciate your time today to learn more about this progress. Let me first touch on some highlights of our second quarter results. We had another solid quarter performance and generated $9.4 million in cash from operations in the quarter, bringing us to about $21 million in the first half of our fiscal year. This is much improved over the use of cash for the first half of fiscal 24. Revenue grew almost 10% despite last year's second quarter benefiting from $4 million in retroactive pricing.
Jennifer Slater: Thank you, Deb, and welcome everyone. I am encouraged with the progress we are making to transform STRATTEC into a stronger, sustainable business with improved earnings power. I appreciate your time today to learn more about this progress. Let me first touch on some highlights of our Q2 results. We had another solid quarter performance and generated $9.4 million in cash from operations in the quarter, bringing us to about $21 million in the H1 of our fiscal year. This is much improved over the use of cash for the H1 of fiscal 2024. Revenue grew almost 10% despite last year's Q2 benefiting from $4 million in retroactive pricing. Margins also improved with Adjusted EBITDA margin expanding 180 basis points. Of note, we continue to execute on our strategic priorities of stabilizing the business, optimizing costs, and evaluating our product portfolio to advance our transformation.
Jim: Thank you, Doug and welcome everyone.
Jim: I am encouraged with the progress we are making to transform <unk> into a stronger sustainable business with improved earnings power I. Appreciate your time today to learn more about this progress.
Jim: Let me first touch on some highlights of our second quarter results. We had another solid quarter of performance and generated $9 $4 million in cash from operations in the quarter, bringing us to about $21 million in the first half of our fiscal year.
Jim: This is much improved over the use of cash for the first half of fiscal 'twenty for.
Jim: Revenue grew almost 10% despite last year's second quarter benefiting from $4 million in retroactive pricing margins also improved with adjusted EBITDA margin expanding 180 basis points.
Jennifer Slater: Margins also improved with adjusted EBITDA margin expanding 180 basis points. Of note, we continue to execute on our strategic priorities of stabilizing the business, optimizing costs, and evaluating our product portfolio to advance our transformation.
Jim: Oh, no we continue to execute on our strategic priorities of stabilizing the business optimizing cost and evaluating our product portfolio and to advance our transformation.
Jennifer Slater: I'll address this more fully if you would turn to slide four. Our focus on operational excellence and optimizing our cost structure resulted in the elimination of one shift in our Milwaukee operations. This change will provide $1.2 million in annualized savings that will be partially recognized beginning in the third quarter or the quarter we are operating in now. We recognize $300,000 of restructuring costs resulting in a very quick payback. We also identified that our Milwaukee facility, which is 350,000 square feet, is roughly twice as much manufacturing space that we require for the stamping, die casting, plating, and other operations we have in the facility.
Jennifer Slater: I'll address this more fully if you would turn to slide 4. Our focus on operational excellence and optimizing our cost structure resulted in the elimination of 1 shift in our Milwaukee operations. This change will provide $1.2 million in annualized savings that will be partially recognized beginning in Q3 or the quarter we are operating in now. We recognized $300,000 of restructuring costs, resulting in a very quick payback. We also identified that our Milwaukee facility, which is 350,000 square feet, is roughly 2x as much manufacturing space that we require for the stamping, die casting, plating, and other operations we have in the facility. The building has been listed for sale, and the results of the process will help inform our next steps. We are continuing to review our manufacturing operations to identify more ways to reduce costs in the business.
Jim: To address this more fully if you would turn to slide four.
Jim: Our focus on operational excellence and optimizing our cost structure resulted in the elimination of one shift in our Milwaukee operations.
Jim: This change will provide $1.2 million in annualized savings that will be partially recognized beginning in the third quarter or the quarter. We are operating in now.
Jim: We recognized $300000 of restructuring costs, resulting in a very quick payback.
Jim: We also identified that our Milwaukee facility, which is 350000 square feet is roughly twice as much manufacturing space that we require for the stamping die casting trading and other operations, we haven't necessarily.
Jennifer Slater: The building has been listed for sale and the results of the process will help inform our next steps. We are continuing to review our manufacturing operations to identify more ways to reduce costs in the business. And yes, the elephant in the room is tariffs. While this continues to be a fluid situation, our ongoing efforts to optimize our costs will help in some respects, along with our strong balance sheet. Regardless, we are being proactive in conversation with our customers and suppliers to better understand the implications and develop any necessary countermeasures.
Jim: Building has been listed for sale and the results of the process will help inform our next steps.
Jim: We are continuing to review our manufacturing operations to identify more ways to reduce costs in the business Andy.
Jennifer Slater: Yes, the elephant in the room is tariffs. While this continues to be a fluid situation, our ongoing efforts to optimize our costs will help in some respects, along with our strong balance sheet. Regardless, we are being proactive in conversation with our customers and suppliers to better understand the implications and develop any necessary countermeasures. Chey Becker-Varto, our new chief commercial officer, has hit the ground running, and our commercial team recently captured about $8 million in new annualized pricing. Of course, the pricing gains are dependent on customer demand and the volume of related products being shipped. We expect that we should begin to realize the improved pricing in Q3. We continue to improve our working capital, specifically by working down our pre-production tooling cost balances.
Andy: And yes, the elephant in the room is tariffs.
Andy: While this continues to be a fluid situation and our ongoing efforts to optimize our costs well health in some respects along with our strong balance sheet, regardless, we are being proactive in conversation with our customers and suppliers to better understand the implications and develop any necessary countermeasures.
Jennifer Slater: Shea Vardo, our new Chief Commercial Officer, has hit the ground running and our commercial team recently captured about $8 million in new annualized pricing. Of course, the pricing gains are dependent on customer demand and the volume of related products being shipped, but we expect that we should begin to realize the improved pricing in the third quarter. We continue to improve our working capital specifically by working down our pre-production tooling cost balances. The strong effort of the team has reduced the balance by $10.5 million or nearly 50% since the start of this fiscal year. Importantly, I believe the investments we are making in upgrading and enabling our talent pool is resulting in accelerating the pace of change here at Strattec.
Andy: Shave Arnaud, our new Chief commercial officer has hit the ground running and our commercial team recently captured about $8 million in new annualized pricing of course, the pricing gains are dependent on customer demand and the volume of related products being shipped but we expect that we should begin to realize the improve.
Andy: Pricing in the third quarter.
Andy: We continue to improve our working capital specifically by working down our preproduction tooling cost balances.
Jennifer Slater: The strong effort of the team has reduced the balance by $10.5 million, or nearly 50% since the start of this fiscal year. Importantly, I believe the investments we are making in upgrading and enabling our talent pool is resulting in accelerating the pace of change here at STRATTEC. Much of what we are discussing on the call today, such as right-sizing our operations, the pricing gains, and the metrics to better understand our underlying performance, are direct outcomes of our investment in our team. Let me talk to the drivers behind our revenue growth on slide 5. Q2 sales increased $11 million as a result of new product launches and higher demand for our products that more than offset end-of-life programs. Much of this growth is higher value content in power access and latches. In addition, we have customers that are building inventory to address their production plans.
Andy: The strong I've heard of the team has reduced the balance by $10.5 million or nearly 50% since the start of this fiscal year.
Andy: Importantly, I believe the investments we are making in upgrading and enabling our talent pool is resulting in accelerating the pace of change here at strat Tac much of what we are discussing on the call today, such as right sizing our operations the pricing gains and the metrics to better understand our underlying performance our day.
Jennifer Slater: Much of what we are discussing on the call today, such as right sizing our operations, the pricing gains, and the metrics to better understand our underlying performance, are direct outcomes of our investment in our team.
Andy: Direct outcome of our investment in our team.
Jennifer Slater: Let me talk to the drivers behind our revenue growth on slide 5. Second quarter sales increased $11 million as a result of new product launches and higher demand for our products that more than offset end-of-life programs. Much of this growth is higher value content in power access and latches. In addition, we have customers that are building inventory to address their production plans. Sales of Power Access products were up 27% year-over-year on new programs, higher value content, and volume. Engineered latches grew 20% over last year's second quarter for the same reasons. This more than offset the continued decline in our mature product line of keys and lock sets.
Andy: Let me talk to the drivers behind our revenue growth on slide five.
Andy: Second quarter sales increased $11 million as a result of new product launches and higher demand for our products that more than offset end of life programs.
Andy: Much of this growth is higher value content empower access and latches and.
Andy: In addition, we have customers that are building inventory to address their production plans.
Jennifer Slater: Sales of Power access products were up 27% year-over-year on new programs, higher value content, and volume. Engineered latches grew 20% over last year's Q2 for the same reasons. This more than offset the continued decline in our mature product line of keys and locksets. Let me turn it over to Matt now to cover our financial results in more detail.
Andy: Sales of power access products were up 27% year over year on new programs higher valium cap value content and volume Engineers latches grew 20% over last year's second quarter for the same reasons.
Andy: That's more than offset the continued decline in our mature product line of keys all access.
Matthew Pauley: Let me turn it over to Matt now to cover our financial results in more detail. Thanks, Jen, and good morning, everyone. Moving to slide six, gross profit was up $3.7 million to $17.2 million, a 27% increase compared to the second quarter last year. The $3.5 million benefit of favorable FX and higher production volumes more than offset headwinds from the prior year one-time net pricing recovery of $2.9 million and increased labor costs. Labor costs were up $1.4 million, reflecting the 20% government-mandated wage increase in Mexico. We also accrued $600,000 for bonuses this year. Gross margin expanded to 13.2% with a 270 basis point benefit of favorable foreign exchange.
Matt: Let me turn it over to Matt now to cover our financial results in more detail.
Matthew Pauli: Thanks, Jen, and good morning, everyone. Moving to slide 6, gross profit was up $3.7 million to $17.2 million, a 27% increase compared to the Q2 last year. The $3.5 million benefit of favorable FX and higher production volumes more than offset headwinds from the prior year one-time net pricing recovery of $2.9 million and increased labor costs. Labor costs were up $1.4 million, reflecting the 20% government-mandated wage increase in Mexico. We also accrued $600,000 for bonuses this year. Gross margin expanded to 13.2%, with a 270 basis point benefit of favorable foreign exchange. Excluding the impact of currency and the prior year one-time pricing recoveries, we delivered about 100 basis points of margin expansion. I should touch on tariffs here a little.
Matt: Thanks, John and good morning, everyone moving to slide six gross profit was up $3 7 million to $17 2 million or 27% increase compared to the second quarter last year.
Matt: $3 $5 million benefit of favorable FX and higher production volumes more than offset headwinds from the prior year, one time net pricing recovery of $2 9 million and increased labor costs.
Matt: Labor costs were up $1 4 million, reflecting the 20% government mandated wage increase in Mexico. We also accrued 600000 for bonuses this year.
Matt: Gross margin expanded to 13, 2% with a 270 basis point benefit from favorable foreign exchange, excluding the impact of currency in the prior year, one time pricing recoveries, we delivered about 100 basis points of margin expansion.
Matthew Pauley: Excluding the impact of currency and the prior year one-time pricing recoveries, we delivered about 100 basis points of margin expansion.
Matthew Pauley: I should touch on tariffs here a little. As is true with the majority of the automotive industry, we are heavily reliant on our assembly operations in Mexico and our global supply chain to provide product to our customers. Approximately 70% of our sales are shipped to the U.S. or picked up by a customer at our distribution center in El Paso. The remaining 30% are sold to OEMs globally. We have certain actions we can take and a few levers to pull. Where the tariff situation lands will also feed into our strategic evaluation of our footprint from a longer-term perspective.
Matt: We should touch on tariffs here I'll, let him.
Matthew Pauli: As is true with the majority of the automotive industry, we are heavily reliant on our assembly operations in Mexico and our global supply chain to provide product to our customers. Approximately 70% of our sales are shipped to the US or picked up by a customer at our distribution center in El Paso. The remaining 30% are sold to OEMs globally. We have certain actions we can take and a few levers to pull. Where the tariff situation lands will also feed into our strategic evaluation of our footprint from a longer-term perspective. Moving to slide 7. Engineering, selling, and administrative expenses, or ES&A, totaled $15 million, a $1.6 million increase compared with last year's Q2. Half of the increase was related to an $800,000 annual bonus provision. Of note, no bonus provision was taken in the comparator period.
Matt: As is true with the majority of the automotive industry. We are heavily reliant on our assembly operations in Mexico, and our global supply chain to provide product to our customers approximately 70% of our share of our sales are shipped to the U S are picked up by a customer at our distribution center in El Paso, the remaining 30% are sold to Oems.
Matt: Globally.
Matt: We have certain actions, we can take in a few levers to pull where.
Matt: Where are the tariff situation lands will also feed into our strategic evaluation of our footprint from a longer term perspective.
Matthew Pauley: Moving to slide 7, Engineering, Selling, and Administrative Expenses, or ES&A, totaled $15 million, a $1.6 million increase compared with last year's second quarter. Half of the increase was related to an $800,000 annual bonus provision. Of note, no bonus provision was taken in the comparator period. We also had $300,000 of incremental non-cash stock compensation expense, $300,000 of restructuring costs, and $200,000 of costs related to the transformation of Strattec. We are investing in people and processes to drive greater predictability and a stronger earnings profile. On 5-8, net income for the second quarter was up 29% to $1.3 million, or $0.32 per diluted share.
Matt: Moving to slide seven engineering, selling and administrative expenses or <unk> totaled 15 million, a $1 6 million increase compared with last year's second quarter. After.
Matt: Half of the increase was related to an $800000 annual bonus provision of note no bonus provision was taken in the comparator period. We also have 300000 of incremental non cash stock compensation expense 300000 of restructuring costs and 200000 of costs related to the transformation of <unk>.
Matthew Pauli: We also had $300,000 of incremental non-cash stock compensation expense, $300,000 of restructuring costs, and $200,000 of costs related to the transformation of STRATTEC. We are investing in people and processes to drive greater predictability and a stronger earnings profile. On slide 8, net income for Q2 was up 29% to $1.3 million or $0.32 per diluted share. Offsetting the benefit of higher operating income and a $300,000 increase in investment income was a $1.5 million increase in other expenses related to gains and losses on our FX hedging activity. As you will notice in the news release, we are now presenting two non-GAAP measures of Adjusted EBITDA and Adjusted net income. Given the investments being made to turn STRATTEC into a more predictable and better-performing business, we believe these metrics will help you understand the underlying performance of the business.
Matt: We are investing in people and processes to drive greater predictability and a stronger earnings profile.
Matt: On slide eight net income for the second quarter was up 29% to $1 3 million or <unk> 32 per diluted share offsetting the benefit of higher operating income and a $300000 increase in investment income was a $1 $5 million increase in other expenses related to gains and losses on our FX.
Matthew Pauley: Offsetting the benefit of higher operating income and a $300,000 increase in investment income was a $1.5 million increase in other expenses related to gains and losses on our FX hedging activity. As you will notice in the news release, we are now presenting two non-GAAP measures of adjusted EBITDA and adjusted net income. Given the investments being made to turn Strattec into a more predictable and better performing business, we believe these metrics will help you understand the underlying performance of the business. We are also using these metrics internally as well to measure our performance. We have provided the reconciliation tables for each period and the full year of fiscal 2024 for your information.
Matt: Hedging activity.
Matt: As you will notice in the news release, we are now presenting to non-GAAP measures of adjusted EBITDA and adjusted net income given the investments being made to turn strategy into a more predictable and better performing business. We believe these metrics will help you understand the underlying performance of the business. We are also using these metrics in.
Matthew Pauli: We are also using these metrics internally as well to measure our performance. We have provided the reconciliation tables for each period and the full year of fiscal 2024 for your information. Adjusted EBITDA for Q2 was $8 million, up 60% compared to the same period last year. Adjusted EBITDA margin expanded 180 basis points to 6.1% due to higher sales volume, favorable changes in FX rates, and cost management initiatives. On an adjusted non-GAAP basis, net income for Q2 was $2.6 million or $0.65 per diluted share. This was up 81% from the prior year's Q2. Lastly, slide 9 highlights our solid balance sheet, financial flexibility, and capital priorities. Free cash flow increased by $12.5 million versus last year's Q2 due to improved operating performance and reduced net working capital.
Matt: <unk> as well to measure our performance we have provided the reconciliation tables for each period and the full year of fiscal 2024 for your information.
Matthew Pauley: Adjusted EBITDA for the quarter was $8 million, up 60% compared to the same period last year. Adjusted EBITDA margin expanded 180 basis points to 6.1% due to higher sales volume, favorable changes in FX rates, and cost management initiatives. On an adjusted non-GAAP basis, net income from the second quarter was $2.6 million, or $0.65 per diluted share. This was up 81% from the prior year's second quarter.
Matt: Adjusted EBITDA for the quarter was $8 million up 60% compared to the same period last year adjusted EBITDA margin expanded 180 basis points to six 1% due to higher sales volume favorable changes in FX rates and cost management initiatives.
Matt: On an adjusted non-GAAP basis net income for the second quarter was $2 6 million or <unk> 65 per diluted share. This was up 81% from the prior year second quarter.
Matthew Pauley: Lastly, slide nine highlights our solid balance sheet, financial flexibility, and capital priorities. Free cash flow increased by $12.5 million versus last year's second quarter due to improved operating performance and reduced net working capital. Most of the working capital decline was related to the continued effort to recover pre-production costs from our customers. We ended the quarter with $42.6 million in cash. I am re-evaluating the capital expenditures for the year and expect to have a better understanding of our needs when we report the third quarter. In the meantime, CapEx of just under $1 million in the second quarter and $3 million in the first half of the year was primarily related to new product programs and equipment upgrades.
Matt: Lastly, slide nine highlights our solid balance sheet financial flexibility and capital priorities.
Matt: Free cash flow increased by $12 $5 million versus last year's second quarter due to improved operating performance and reduced net working capital.
Matthew Pauli: Most of the working capital decline was related to the continued effort to recover pre-production costs from our customers. We ended the quarter with $42.6 million in cash. I'm reevaluating the capital expenditures for the year and expect to have a better understanding of our needs when we report Q3. In the meantime, CapEx of just under $1 million in Q2 and $3 million in H1 of the year was primarily related to new product programs and equipment upgrades. Our capital priorities as we advance through the transformation of the business are internally focused on operational efficiencies, productivity tools, and organic growth initiatives.
Most of the working capital decline was related to the continued effort to recover preproduction costs from our customers.
Matt: Ended the quarter with $42 6 million in cash.
Matt: Reevaluating the capital expenditures for the year and expect to have a better understanding of our needs. When we report the third quarter in.
Matt: In the meantime, capex of just under $1 million in the second quarter and $3 million in the first half of the year was primarily related to new product programs and equipment upgrades.
Matthew Pauley: Our capital priorities as we advance through the transformation of the business are internally focused on operational efficiencies, productivity tools, and organic growth initiatives. While the current tariff situation creates a potential challenge in the near term, we are encouraged with the actions we are taking to advance Strattec through operational excellence, strengthening our commercial initiatives, capturing the value of our innovation, and creating an energized and experienced team.
Our capital priorities as we advance through the transformation of the business are internally focused on operational efficiencies and productivity tools and organic growth initiatives.
Matthew Pauli: While the current tariff situation creates a potential challenge in the near term, we are encouraged with the actions we are taking to advance STRATTEC through operational excellence, strengthening our commercial initiatives, capturing the value of our innovation, and creating an energized and experienced team. With that, operator, we can open the line for questions.
Matt: While the current tariff situation creates a potential challenge in the near term. We are encouraged with the actions we are taking to advance <unk> through operational excellence.
Matt: <unk>, our commercial initiatives, capturing the value of our innovation and creating an energized and experienced team.
Operator: With that, operator, we can open the line for questions. Thank you.
Matt: With that operator, we can open the line for questions.
Operator: Thank you. We'll now be conducting a question and answer session. Thank you. Our first question comes from the line of John Franzreb with Sidoti & Company. Please proceed with your questions.
Matt: Thank you well now be conducting a question and answer session. If you'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.
Operator: We'll now be conducting a question and answer session. If you'd like to ask a question at this time, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for questions. Thank you.
Matt: Press Star two if he like to withdraw your question from the queue.
Matt: For participants are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Matt: One moment, please when we poll for questions. Thank you.
Matt: Yeah.
John Franzreb: Our first question comes from the line of John Franzreb with Sidoti Company. Please proceed with your question.
Speaker Change: Thank you. Our first question comes from the line of John France, Rub with Sidoti and company. Please proceed with your questions.
John Franzreb: Good morning, everyone, and thanks for taking the questions and congratulations on a good quarter. Jen, I'd like to start with your assessment of progress that you made as far as the evaluation of the company. In your opinion, how far along are you and when do you think the process will finally be, you know, initially completed at least?
John Franzreb: Good morning, everyone. Thanks for taking the questions and congratulations on a good quarter. Jen, I'd like to start with your assessment of the progress that you've made as far as the evaluation of the company. In your opinion, how far along are you? When do you think the process will finally be initially completed, at least?
John France: Good morning, everyone and thanks for taking the questions and congratulations on a good quarter.
Speaker Change: John I'd like to start with your assessment of the progress that you've made as far as the evaluation of the company.
Speaker Change: In your opinion, how far along are you in and when do you think the process will finally be.
Speaker Change: Actually completed at least.
Speaker Change: Yeah.
Jennifer Slater: Hi, John. Thanks for the question. You know, I feel really positive about the progress that we're making, but I still think we're really early in the process. We're, you know, I'm seven months in and I would say we're making good, we've, we're proud of some of the things that we're doing, but there's a lot more work to do, John.
Jennifer Slater: Hi, John. Thanks for the question. I feel really positive about the progress that we're making, but I still think we're really early in the process.
Speaker Change: Hi, John Thanks for the questions.
Speaker Change: I feel really positive about the progress that we're making but I still think we're really early in the process.
Speaker Change: We're seven months in and I would say, we're making good we were proud of some of the things that we're doing but there's a lot more work to do John.
Jennifer Slater: I'm seven months in, and I would say we're proud of some of the things that we're doing, but there's a lot more work to do, John.
Jennifer Slater: Okay, fair enough. And in the prepared remarks, you mentioned the benefit of higher value products as far as benefiting the, not only the top line, but I'm assuming the margin profile. Can you give us some examples of those products and maybe talk a little bit about why they're doing better today than, say, a year ago?
John Franzreb: Okay, fair enough. In the prepared remarks, you mentioned the benefit of higher value products as far as benefiting not only the top line, but I'm assuming the margin profile. Can you give us some examples of those products and maybe talk a little bit about why they're doing better today than we're, say, a year ago?
Speaker Change: Okay fair enough.
Speaker Change: And in the prepared remarks, you mentioned the benefit of higher value.
Speaker Change: Products as far as benefiting the not only the top line, but I'm assuming that the margin profile can you give us some examples of those products and maybe talk a little bit about why they're doing better today than where say a year ago.
Jennifer Slater: Yeah. In our power access products with our power sliding doors and power liftgates, we've seen some good growth in just demand from customers and program launches there.
Jennifer Slater: Yeah. So in our power access products with our power sliding doors and power lift gates, we've seen some good growth in just demand from customers and program launches there.
Speaker Change: So in our power access products with our power sliding doors and power.
Speaker Change: Gates, we've seen some good growth and just demand from customers and program launches there.
John Franzreb: Understood. You mentioned about $8 million of new pricing starting in the third quarter.
John Franzreb: Understood. You mentioned about $8 million of new pricing starting in the Q3. Can you give us a little background of how you're able to achieve that kind of new pricing after getting a fair amount recognized last year?
Speaker Change: Understood.
Speaker Change: You mentioned about $8 million of new pricing starting in the third quarter.
Jennifer Slater: Can you give us a little background of how you were able to achieve that kind of new pricing after getting a fair amount recognized last year? Yeah, I think, as you know, with our automotive customers, we enter into longer term agreements. And one of the things that Shea Bardo has done is really worked with our customers and understood where we were in our contract life and where they wanted us to continue to support them as they may be extending those programs. So really, that pricing is just a representation of some of the work that she's done with the team and where customers are extending programs or outside of the contract life and we're recognizing, you know, near term economics.
Speaker Change: Can you give us a little background of how you're able to achieve that kind of new pricing after getting.
Speaker Change: A fair amount recognized last year.
Jennifer Slater: Yeah. I think as you know, with our automotive customers, we enter into longer term agreements.
Speaker Change: Yeah, I think as you know with our automotive customers, we enter into longer term agreements and one of the things that shave Bartow has done is really worked with our customers and understood.
Jennifer Slater: That Chey Becker-Varto has done is really worked with our customers and understood where we were in our contract life and where they wanted us to continue to support them as they may be extending those programs. Really that pricing is just a representation of some of the work that she's done with the team and where customers are extending programs or outside of the contract life, and we're recognizing near-term economics.
Speaker Change: Understood, where we were in our contract lives and where.
Speaker Change: They wanted us to continue to support them as they may be extending those programs. So.
Speaker Change: Really that pricing is just a representation of some of the work that she's done with the team and where customers are extending programs are outside of the contract life and we're recognizing.
Speaker Change: Near term economics. This is Matt I'd, just add that the pricing that we achieved is across multiple different of our product categories and across multiple different Oems.
Matthew Pauley: This is Matt. I just add that the pricing that we achieved is across multiple different of our product categories and across multiple different OEMs. That's good to hear. It's good to see the balance.
Matthew Pauli: This is Matthew. I'd just add that the pricing that we achieved is across multiple different of our product categories and across multiple different OEMs.
John Franzreb: That's good to hear. It's good to see the balance. Regarding the tooling, should we view this as probably a stable go-forward level, or you think there's more to achieve as far as tooling benefits?
Speaker Change: That's good to hear it's good to see the balance.
John Franzreb: And regarding the tooling, should we kind of view this as probably a stable go-forward level, or do you think there's more to achieve as far as tooling benefits? Yeah, I think we've made significant progress on the tooling balance in the first half of the year. I think there's a little bit left to go, but the pace of change, the pace of reduction will level out here in the back half of the year.
Speaker Change: And regarding the tooling.
Should we kind of view this is probably.
Speaker Change: Stable go forward level, or you think theres more to achieve as far as tooling benefits.
Matthew Pauli: Yeah, I think we've made significant progress on the tooling balance in the H1 of the year. I think there's a little bit left to go. The pace of change or the pace of reduction will level out here in the H2 of the year.
Speaker Change: Yes, I think we've made significant progress on the tooling balance in the first half of the year I think theres a little bit left to go but the pace of change the pace of reduction will level out here in the back half of the year.
John Franzreb: Okay, I'll actually end it there and let somebody else take some questions. Thanks for answering my questions, everybody. Thank you, John.
John Franzreb: Okay. I'll actually end it there and let somebody else take some questions. Thanks for answering my questions, everybody.
Speaker Change: Okay.
Speaker Change: Archie ended it there and let somebody else take some questions. Thanks for answering my questions everybody.
Matthew Pauli: Thank you.
Jennifer Slater: Thank you, John.
John France: Thank you John.
Speaker Change: Yes.
Operator: Thank you.
Operator: Thank you. Our next question's from the line of Guy Baron with Springview Capital. Please proceed with your questions.
Speaker Change: Thank you.
Speaker Change: Our next question is from the line of Guy Baron with Springs Capital. Please proceed with your questions.
Think Fang: Hi, Jen and Matt. How are you?
Guy Baron: Hi, Jen and Matt. How are you?
Guy Baron: Hi, John and Matt.
Matthew Pauli: Good morning.
Speaker Change: How are you.
Guy Baron: Good quarter.
Think Fang: Think Fang. question. John already asked some of the questions that I had, but on the $8 million in annualized pricing, is that a midpoint of a range? Because you said that it depends on Customer demand. So how did you is that a midpoint or is that a Is there a range to that $8 million of pricing that you expect to get?
Jennifer Slater: Thanks, Guy.
Guy Baron: Thanks.
Guy Baron: Question. John already asked some of the questions that I had. On the $8 million in annualized pricing, is that a midpoint of a range? Because you said that it depends on customer demand. Is that a midpoint or is there a range to that $8 million of pricing that you expect to get?
Guy Baron: Question.
Guy Baron: The pie.
Guy Baron: January asked some questions that I had thought.
Guy Baron: Hum.
Guy Baron: $8 million in annualized pricing is that a midpoint of a range because you said that.
Guy Baron: Zach.
Guy Baron: Customer demand. So how did you is that a mid point or is that a.
Guy Baron: There's no change to that $8 million of pricing that you all did you.
Matthew Pauley: Yes. The projected annualized value of the impact based on our projected sales. So there's some upside and some potential downside to that based on demand. Yeah, based on our customer production.
Guy Baron: You bet yeah. It's.
Jennifer Slater: Yeah. It's the projected annualized value of the impact based on our projected sales.
Guy Baron: The projected annualized value of the impact based on our projected sales.
Guy Baron: There's some upside and some potential downside to that based on demand.
Guy Baron: So there is.
Guy Baron: Some upside and some potential downside to that based on demand based.
Jennifer Slater: Yeah. Based on our customer production.
Guy Baron: Based on our customer production okay. Okay.
Guy Baron: Okay. When do you expect to cycle the 20%, the wage increases in Mexico?
Matthew Pauley: And then when should you, when do you expect to cycle the 20% the wage increases in Mexico? Yeah, we saw the last impact of that here in our second quarter. So that was the 20% increase was the merit or the mandated increase last January. This January, the merit increase was much less than the 20%. It was close to 12% in. So the impact of that will kind of diminish as we go forward. on a quarterly basis? You'll still see the impact of the 12% merit increase as we go through the balance of the year here.
Guy Baron: And then one when should you when do you expect to cycle that 20%.
The wage increases in Mexico.
Matthew Pauli: Yeah, we saw the last impact of that here in our Q2. The 20% increase was the mandated increase last January. This January, the merit increase was much less than the 20%. It was close to 12% in Mexico.
Guy Baron: Yes, we saw the last impact of that here in our second quarter. So that was the 20% increase was the Meredith.
Guy Baron: The mandated increase last January.
Guy Baron: This January the merit increase was much less than the 20% it was close to 12% in Mexico.
Guy Baron: The impact of that will kind of diminish as we go forward on a quarterly basis?
Guy Baron: So Dave back to that will diminish as we go forward.
Guy Baron: On a quarterly basis, you'll still see the impact of the 12% Merit increase as we go through the balance of the year here.
Matthew Pauli: You'll still see the impact of the 12% merit increase as we go through the balance of the year here.
Guy Baron: Okay. On the real estate on the headquarters, I saw you listed it for $17 million. How has that been received so far? What are you seeing out there in terms of the market?
Guy Baron: Okay.
Matthew Pauley: And then on the. On the real estate, on the headquarters, I saw you listed it for $17 million. How's that been received so far? What are you, what are you seeing out there in terms of? Yeah, we just listed the facility in January, so we're early in the process, but what I'd say is I think the brokers are happy with the activity and the interest in the facility right now. What, how long do you see that, um, that process, uh, uh, taking? It's really hard for us to anticipate, but, you know, it's still going to take us some time to get through the full process.
Guy Baron: And then on the on.
Speaker Change: And the real estate on the headquarters I saw you listed it for 17 million has that been received so far what are you. What are you seeing out there in terms of all of us.
Guy Baron: Market, yes.
Matthew Pauli: Yeah, we just listed the facility in January, so we're early in the process. What I'd say is I think the brokers are happy with the activity and the interest in the facility right now.
Guy Baron: I mean, we just listed the facility in January so we're early in the process, but what I'd say is I think the brokers are happy with the activity and the interest in the facility right now.
Guy Baron: Okay. How long do you see that process taking?
Guy Baron: Okay.
Speaker Change: How long do you see that.
Guy Baron: That process now.
Guy Baron: Oh, taking.
Jennifer Slater: It's really hard for us to anticipate. It's still going to take us some time to get through the full process.
Guy Baron: It's really hard for us to anticipate them, but you know.
Guy Baron: It's still going to take us some time to get through the full process.
Think Fang: And that high-level question really is on your kind of run rate EBITDA power, right? So you did, I think, adjusted EBITDA of $18 or $19 million in the first half. of this year. And typically your seasonality is such that, you know, you generate like 30 or 35% of your annual EBITDA in the first half. 70% or so in the second, which implies. full year EBITDA range can be, you know, $50, $55 million, just based on these, on the performance that you've achieved so far this year. Is that a good run rate? Because that would be a really nice number.
Guy Baron: Okay. High-level question really is on your kind-of run rate EBITDA power. You did, I think, Adjusted EBITDA of $18 or 19 million in the H1 of this year. Typically, your seasonality is such that you generate like 30% or 35% of your annual EBITDA in the H1 and 70% or so in the H2, which implies full-year EBITDA range can be $50 million, $55 million, just based on the performance that you have achieved so far this year. Is that a good run rate? That would be a really nice number.
Guy Baron: And then high level question really is on your kind of run rate EBITDA power.
Guy Baron: You did I think adjusted EBITDA of $18 million to $19 million in the first half.
Guy Baron: Of this year and typically your seasonality is such that you generate like 30 or 35% of your annual EBITDA in the first half.
Guy Baron: 70% or so in the second which implies.
Guy Baron: Full year EBITDA range can be you know 50 $55 million.
Guy Baron: I'm sure you saw.
Guy Baron: On the performance that you have achieved so far this year is that is that a good run rate is that that would be yeah.
Guy Baron: Really nice numbers no.
Matthew Pauley: No, I don't think that's necessarily the run rate. I think if you look at it, our sales are slightly higher in the back half of the year than the first half of the year. I think if you're looking at historical periods, keep in mind there was a lot of one-time retro pricing in the prior year, which makes that comparison maybe a little bit difficult on a go-forward basis. Great.
Matthew Pauli: No, I don't think that's necessarily the run rate. I think if you look at it, our sales are slightly higher in H2 than H1. I think if you're looking at historical periods, keep in mind there was a lot of one-time retro pricing in the prior year, which makes that comparison maybe a little bit difficult on a go-forward basis.
Guy Baron: No I don't I don't think that's necessarily the run rate I think if you look at it our sales are slight.
Guy Baron: Slightly higher in the back half of the year than the first half of the year I think if youre looking at historical periods keep in mind. There was a lot of one time retro pricing in the prior year.
Which makes that comparison, maybe a little bit difficult on a go forward basis.
Guy Baron: Got it. Great. All right. Thank you so much.
Think Fang: Thank you so much. Thank you, guys.
Guy Baron: Yeah.
Guy Baron: Thank you so much thank.
Jennifer Slater: Thank you, Guy.
Matthew Pauli: Thanks, Jim.
Guy Baron: Thank you Guy.
Brian Sponheimer: Our next question is from the line of Brian Sponheimer with Cabeli Funds.
Operator: Our next question's from the line of Brian Sponheimer with Gabelli Funds. Please proceed with your questions.
Guy Baron: Our next.
Speaker Change: <unk> is from the line of Brian <unk> with Gabelli funds. Please proceed with your questions.
Brian Sponheimer: Hi, good morning, Jen, Matt, and Deb. Thanks for getting me on here. Just a couple quick ones about. uh... balance sheet obviously sitting with quite a bit of cash now uh... on the balance sheet obviously you have some needs as it relates to how you want to potentially move the footprint but you know assuming that the milwaukee headquarters is a positive sale uh...
Brian Sponheimer: Hi, good morning, Jennifer Slater, Matthew Pauli, and Deborah Pawlowski. Thanks for getting me on here. Just a couple of quick ones about balance sheet. Obviously, sitting with quite a bit of cash now on the balance sheet. Obviously, you have some needs as it relates to how you want to potentially move the footprint. Assuming that the Milwaukee headquarters is a positive sale, and the business continues to improve, how are you thinking about financial structure for the business going forward?
Speaker Change: Hi, Good morning, John and Matt and.
Speaker Change: Thanks for getting me on here.
Speaker Change: Just a couple quick ones are about.
Speaker Change: <unk> balance sheet, obviously sitting with quite a bit of cash now on the balance sheet. Obviously, you have some needs as it relates to how you want to potentially move the footprint, but you know assuming that the Milwaukee headquarters is a positive sale.
Matthew Pauley: and the business continues to improve you know how are you thinking about Financial structure for the business going Yeah, thanks for that question, Brian. Obviously, the cash is important for us right now as we navigate through potential tariff impacts. But as we think about our strategic priorities for our use of cash, like you said, you know, internally, we're focused on some of the things that we need from a cash perspective to realize our operational efficiencies and making sure we've got the right processes and technologies in place. We're also looking at, you know, our product portfolio and where we may need to invest organically for our customers to continue growth.
Speaker Change: And the business continues to improve you know how are you thinking about.
Speaker Change: Financial structure for the business going forward.
Jennifer Slater: Yeah, thanks for that question, Brian. Obviously, the cash is important for us right now as we navigate through potential tariff impacts. As we think about our strategic priorities for our use of cash, like you said, internally, we're focused on some of the things that we need from a cash perspective to realize our operational efficiencies and making sure we've got the right processes and technologies in place. We're also looking at our product portfolio and where we may need to invest organically for our customers to continue growth. I think we get into a more longer term focus after that.
Yeah. Thanks for that question, Brian obviously, the cash is important for US right now as we navigate through potential tariff impacts, but as we think about our strategic priorities for our use of cash like you said internally we're focused on some of the things that we need from a cash perspective.
Speaker Change: To realize our operational efficiencies and making sure we've got the right processes and technologies in place.
Speaker Change: We're also looking at our product portfolio, and where we may need to invest organically for our customers to continue growth.
Matthew Pauley: And then I think we get, you know, into a more longer-term focus after that.
Speaker Change: And then I think we get into a more longer term focused after that.
Speaker Change: Okay.
Matthew Pauley: One off the balance sheet, the accrual for post-retirement, didn't ask that last quarter, but can you just talk about that? It's a little bit bigger than that. In the quarter, we did make a reclassification on the balance sheet. It's just a flip from current liabilities to long-term liabilities, so it's associated with our Mexican post-retirement benefits. Previously, the balance was reported as short-term and it properly should be reported as a long-term liability, so it's just a balance sheet classification. What, did you do anything, or was it just improperly, or? It's just a balance sheet classification. The liability was properly stated, and the expense was properly recorded in the past.
Brian Sponheimer: One off the balance sheet, the accrual for post-retirement. I didn't ask that last quarter, can you just talk about that? It's a little bit bigger than it's been in the past.
Speaker Change: One off the balance sheet.
Speaker Change: The accrual.
Speaker Change: For post retirement.
Speaker Change: Didnt asked that last quarter, but can you just talk about that it's a little bit bigger than it's been in the past.
Matthew Pauli: Yeah. In the quarter, we did make a reclassification on the balance sheet. It's just a flip from current liabilities to long-term liabilities. It's associated with our Mexican post-retirement benefits. Previously, the balance was reported as short-term, and it properly should be reported as a long-term liability. It's just a balance sheet classification.
Speaker Change: Yeah.
Speaker Change: In the quarter, we did make a reclassification on the balance sheet. It's just a flip from current liabilities to long term liabilities. So it's associated with our Mexican postretirement benefits previously the balances reported as short term and it properly it properly should be reported as a long term liability. So it's just a balance sheet classification.
Brian Sponheimer: Anything change about what-
Speaker Change: Anything change about.
Matthew Pauli: No.
Brian Sponheimer: Did you do anything or was it just improperly?
Speaker Change: What did you do anything or was it just in properly or just the.
Matthew Pauli: It's just a balance sheet classification. The liability was properly stated and the expense was properly recorded in the past.
Speaker Change: Just a balance sheet classification. The liability was properly stated in the expense was properly recorded in the past got it okay.
Brian Sponheimer: Got it. Okay. Just kind of thinking about products and what you're finding. Clearly, Power Access is doing great. You have some headwinds on the lock and key set side. As you're kind of really planting your roots here, Jen, anywhere in particular that outside of Power Access, you see some opportunities to really grow the production base from a customer standpoint?
Matthew Pauley: Got it.
Brian Sponheimer: Okay. Just kind of thinking about... products and what you're finding clearly Power Access is doing great, have some headwinds on The lock and key set side But as you're kind of getting your...
Speaker Change: I'm just.
Speaker Change: Just kind of thinking about prop.
Speaker Change: Products and what Youre, finding clearly power access is doing great to have some headwinds on.
Speaker Change: The lock and key set side.
Speaker Change: But as you're kind of getting your you know really planting your roots here Jen.
Jennifer Slater: Really planting your roots here, Jen. Anywhere in particular that outside of power access you see some opportunities to really grow the production base from a customer standpoint. We are, you know, as we're working on our internal focus on operational improvement, we're parallel pathing our strategic work on our portfolio and our customer base. So, you talked about Power Access, that's the easy part for us to look at to see what other addressable customers within transportation could use that product portfolio. And then we go out from there, Brian, and look at what other opportunities do we have organically on our products to grow with the current capabilities that we have today.
Speaker Change: Anywhere in particular that outside of power access you see some opportunities to really grow the grow the production base from a customer standpoint.
Jennifer Slater: As we're working on our internal focus on operational improvement, we're parallel pathing our strategic work on our portfolio and our customer base. You talked about power access. That's the easy part for us to look at to see what other addressable customers within transportation could use that product portfolio. We go out from there, Brian, and look at what other opportunities do we have organically on our products to grow with the current capabilities that we have today.
Speaker Change: We are as.
Speaker Change: As we're working on our internal focus on operational improvement, we're parallel passing our strategic work on our portfolio and our customer base. So you talked about power access that's the easy part for us to look at to see what other addressable customers within chance Cretaceous.
Speaker Change: Could use that product portfolio and then we go out from there Brian and look at what other opportunities do we have organically on our products to roll with the current capabilities that we have today.
Brian Sponheimer: Okay. All right, thanks. Any other questions, I'll take offline.
Speaker Change: Okay.
Brian Sponheimer: All right, thanks.
Speaker Change: Alright, thanks, any other questions I'll take offline.
Operator: Any other questions? Okay, thanks, Brian.
Jennifer Slater: Okay. Thanks, Brian.
Speaker Change: Okay. Thanks, Brian.
Operator: Thank you. Our next question is from Guy Baron with Springview Capital. Please proceed with your questions.
Speaker Change: Thank you.
Guy Baron: Our next question is from Guy Baron with Springview Capital. Please proceed with your question. Hey, quick, quick follow up on on the on the customer side. You mentioned really good progress with Ford and GM and Kia.
Speaker Change: Thank you. Our next question is from Guy Baron with Spring Loop capital. Please proceed with your questions.
Guy Baron: Hey, quick follow-up. On the customer side, you mentioned really good progress with Ford, GM, and Kia. What about Stellantis? They've been having problems. They're a big customer. Are you seeing that? I assume that was a headwind over the last couple of quarters. Where do you see that going? How is that customer trending for you?
Speaker Change: Hey, quick quick follow up on.
Speaker Change: On the on the customer.
Speaker Change: Syed you mentioned really are.
Speaker Change: Good progress is that Ford.
Speaker Change: Ford and GM and kept the Atlantis, they've been having problems, they're a big customer or are you seeing that.
Jennifer Slater: What about Stellantis? They've been having problems. They're a big customer. Are you seeing that? I assume that was that was a headwind and over the last couple of quarters. Do you, what do you see that going? How's that business, that customer trending for you? Yeah, a lot of our sales are dependent on what platforms we're on. But, you know, we haven't seen while they've been managing their inventory, we haven't seen any significant changes with the platforms that we're on with Philantis and the products we provide. How were your sales with that year-over-year in the quarter?
Speaker Change: I assume that was that was a headwind.
Speaker Change: For the last couple of quarters, where do you see that going.
Speaker Change: How is that business that customer trending for you.
Jennifer Slater: Yeah. A lot of our sales are dependent on what platforms we're on. While they've been managing their inventory, we haven't seen any significant changes with the platforms that we're on with Stellantis and the products we provide.
Speaker Change: Yeah, a lot of our sales are dependent on what platforms. We're on.
Speaker Change: But you know we haven't seen while they've been managing their inventory, we haven't seen any significant changes with the platforms that we're on with the assets and the products we provide.
Guy Baron: Okay. How were your sales with them year-over-year in the quarter?
Speaker Change: Okay.
Speaker Change: When you sell.
Speaker Change: How about yourselves with that year over year in the quarter.
Jennifer Slater: They were down about 10% in the quarter on a year-over-year basis.
Matthew Pauli: They were down about 10% in the quarter on a year-over-year basis.
Speaker Change: They were down about 10% in the quarter on a year over year basis.
Guy Baron: Okay. All right. Thank you.
Speaker Change: Okay.
Guy Baron: All right. Thank you. Thanks, Guy.
Speaker Change: Alright, thank you.
Jennifer Slater: Thanks, Guy.
Speaker Change: Thanks Guy.
Operator: Thank you.
Operator: Thank you. This will conclude today's question and answer session and also will conclude today's teleconference. We thank you for your participation. You may now disconnect your lines at this time, and have a wonderful day.
Speaker Change: Thank you. This will conclude today's question and answer session. I'd also will conclude today's teleconference. We thank you for your participation you may now disconnect. Your lines at this time and have a wonderful day.
Operator: This will conclude today's question and answer session and also will conclude today's teleconference. We thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.
Speaker Change: Yeah.